Apple Lowers Revenue Guidance for Q1 2019 Citing 'Fewer iPhone Upgrades' Than Anticipated

[FriendlyMackle]

The iPhone is an increasingly mature platform. How much “better” is the XS vs the X?

The price increases didn’t help, though.

The only perceptible difference (to me) is the increased screen size—which is the ONLY reason I upgraded. I purchased the X at release knowing that there would probably be a larger-sized phone the following year...and I figured I would see if I preferred the smaller screen. Since I've used a "Plus" sized iPhone since the 6. Ultimately, the problem I had was that the screen on the X was too narrow, and the unusable areas blocked off for controls was too large in area when compared to the total screen area. Video is TINY on the X, due to the unusual screen ratio/dimensions. I don't watch that much video on my phone, but I do watch some short segments, and the really small size and black box area on the X really bothered me.

I know that the Xs Max (I shudder at the name...whomever thought that one up should be locked into a public pillory and pelted with rotten food and worse!) does not feel any faster than the X did.

 

[MyMacintosh]

Cook offered up a number of explanations for the decline, some of which were mentioned during the fourth quarter earnings call.

Cook says that the timing of the iPhone XS, XS Max, and XR launch compared to the timing of the iPhone X launch last year will impact year-over-year comparisons, as will the strength of the U.S. dollar.

Apple Watch Series 4, iPad Pro, MacBook Air, and AirPods were constrained during the holiday season, leading to an inability to keep up with demand, and economic weakness in emerging markets played a major role in the guidance change.

In China specifically, Apple saw a significant decline in sales, especially during the second half of 2018, which Cook says was in part due to rising trade tensions with the United States.

All of this but won't mention the real reason which is more likely associated with the pricing of the phones. Amazing

 

[s15119]

Time for Tim Cook to retire and enter politics. Hire someone with some passion and product vision to run Apple.

Haha. Yeah, the most successful CEO in the history of the world, revenue of approximately $84 billion. He must be on his way out. Come on people. Get a grip. Tim's not going anywhere.

 

[AlumaMac]

That's true, but it's nearly an 8% drop from the guidance they provided for what should be their biggest quarter of the year. That's truly bad news.

Yep, unless they have some great stuff up their 'pipeline' it's going to be a rough couple quarters ahead.

 

[Adam-Jobs]

I wouldn’t say this is the beginning of the end for Apple like some have suggested. Just Apple becoming a very normal, not so unique company. It’s lost it’s “specialness”, probably did so a few years ago, but point still stands.

 

[S.B.G]

Cook says that the timing of the iPhone XS, XS Max, and XR launch compared to the timing of the iPhone X launch last year will impact year-over-year comparisons, as will the strength of the U.S. dollar.

Yeah, maybe. But the real reason perhaps is that they're too damn expensive.

 

[Carnegie]

I think, for AAPL shareholders, the most important piece of information in this 8-K might be the estimate for the diluted share count that will be used to calculate EPS. It suggests that Apple didn’t buy a lot of shares during the last quarter as some might have expected.

I have my own take on that information, and what it might mean for AAPL going forward. Others can make their own assessment. But, regardless of how one thinks that information cuts, it’s noteworthy.

 

[ryanwarsaw]

Also noticing a lotto other stocks dropped on this news. The market started off way down today because of grim financial reports about China. Phone prices aside it seems the market may be taking this as further proof of that news.

 

[hiroden]

Buying the new iPhone is getting very unaffordable in Canada...

 

[Bawstun]

The slow decline of Apple has begun. They will never "beat" estimates again, not for years at this rate. The phones designs have been flops - the computers haven't been refreshed in years - the product line has been completely fragmented and not in a beneficial or intelligent way. The culture of Apple *IS* disappearing.

Stop focusing on the money. Yes, they are a profitable company. So was RIM, so was Nokia, so was Microsoft with the RAZR.

It doesn't matter when you start losing consumer confidence and brand image. ANY major competitor emerges in a slight downslide like this, and it could totally snowball effect and lead to a rapid decline of sales and interest.

FIRE TIM COOK! Apple needs real vision again, before it is too late.

 

[KPOM]

They're not going to sell a revised version of a phone that not many people bought when it was new. They sold more than they expected, but more than not much is just some, and some is not enough for the big R&D spend for this otherworldly iPhone X-style design people seem to be hoping for.

I'd say a smarter expectation than the aforementioned "iPhone SE 2" is that with time they'll decide to keep a biannually updated 4.7" iPhone with last year's innards starting in the $449-549 range. An iPhone SE, somewhat, in the iPhone 7's design and with a higher price tag, most likely.

I was using the term iPhone SE 2 to refer to a updated mid-priced device conceptually, rather than referring to a specific render (e.g. the iPhone X-style screen in an iPhone 5 case). I think this launch has shown that they can’t keep raising prices, or spur upgrades at the current prices. China is too important a market to cede to Huawei.

 

[Abazigal]

Maybe it's time for the Apple and and its apologists to come down to Earth and realize that product pricing is out of touch with consumers. Today's news is a slap in the face that this is the case. I personally would have upgraded if it didn't cost a fortune, but I'm skipping it because cost/value is ridiculous.

Did you even read my subsequent comment? Apple is actually expecting revenue growth in numerous countries outside of China, while many of their non-iPhone products continue to do well. This shows that pricing isn’t the reason for declining revenue. Or at least not the main one.

 

[KPOM]

Buying the new iPhone is getting very unaffordable in Canada...

Interestingly, Canada is one of the markets they cited as being strong.

 

[FriendlyMackle]

Well golly, who would have thought that sales would be low when the 'budget', stripped-down iPhone costs as much as a 6s Plus, a flagship iPhone, did when it was new. And that's not even starting on the iPad Pros that bend like a piece of paper, turning into an $1800 paperweight.

And with a crappy 720p screen! Yeah, maybe you won't notice the difference...but really? I cannot believe that the cost differential between a 720p and 1080p screen is more than $1 per unit. Most 'flagship' phones go FAR beyond 1080p, which really should be the minimum acceptable in anything other than a feature-phone or dumb-phone. And this is still a $700+ phone!

 

[ryanwarsaw]

I think, for AAPL shareholders, the most important piece of information in this 8-K might be the estimate for the diluted share count that will be used to calculate EPS. It suggests that Apple didn’t buy a lot of shares during the last quarter as some might have expected.

I have my own take on that information, and what it might mean for AAPL going forward. Others can make their own assessment. But, regardless of how one thinks that information cuts, it’s noteworthy.

I read that Apple lost around 9 billion buying their own stocks back lately. It is beginning to appear they made some serious miscalculations.

https://www.businessinsider.com/aapl-stock-price-decline-apple-lost-9-billion-on-buybacks-2018-12

 

[KPOM]

Did you even read my subsequent comment? Apple is actually expecting revenue growth in numerous countries outside of China, while many of their non-iPhone products continue to do well. This shows that pricing isn’t the reason for declining revenue. Or at least not the main one.

Except since iPhone is 70% of their revenue and profits, a shortfall in XS sales has a major impact. They said that sales of the XS and XS Max wasn’t as high as expected in China, as well as some other established markets.

 

[The Game 161]

They won’t drop the prices of their phones. They’ll just do more to try and get you to buy them.

Such as what? Pricing is the only thing they can change to make people buy...

 

[Spoon!]

Maybe stop charging $30 for an adapter that causes them $1.25 to make.....

That'll never happen.

 

[Freida]

This is by far the best thing in 2019! Keep them coming!

 

[robjulo]

And already some of the usual suspects running in to try and do pro bono damage control for Apple.

 

[Gorms]

Wow.

 

[Danilo - Italy]

Apple needs to reduce his prices of about 20%.

 

[KPOM]

Well golly, who would have thought that sales would be low when the 'budget', stripped-down iPhone costs as much as a 6s Plus, a flagship iPhone, did when it was new. And that's not even starting on the iPad Pros that bend like a piece of paper, turning into an $1800 paperweight.

Let’s not exaggerate. The iPad Pros are not that delicate. Plus they said that sales of the iPad Pro (and MacBook Air) were supply-constrained, not demand-constrained.

The major problem for them is that the smartphone market has plateaued. 5G is probably 2 years away, so they may need to rethink their pricing and product strategy for the 2019 launch.

 

[iosuser]

Cook says that Apple saw "fewer iPhone upgrades" than anticipated as a result of the aforementioned factors, requiring the company to lower its expected revenue estimates

Maybe because Tim & co overestimated people's willingness to pay their ever rising prices? First time since the 3GS that no new iPhone (or any other Apple products) purchases was made in the year in my household and immediately family.

 

[lostczech]

iPhone XS, XS Max, and XR... Who even knows what all these models mean?

Guess it's time for Apple to start tanking the OS to force people into buying new phones.

Whatever happened to iPhone I, II, III, IV, V.....

That's how people have been trained.

Whatever happened to what again? It started out as:
iPhone
iPhone 3G
iPhone 3GS

There was no roman numerals until 2017's iPhone X